The Power of a Financially Literate Woman

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See all articles by Anurag Narayan Banerjee

Anurag Narayan Banerjee

Durham Business School

Iftekhar Hasan

Fordham University ; Bank of Finland; University of Sydney

Kamlesh Kumar

Durham University, Business School, Department of Economics and Finance, Students

Dennis Philip

Durham University - Department of Economics and Finance

Date Written: September 14, 2020

Abstract

Using broad cross-sectional information from Indian households, we find that women who are financially literate take on higher levels of responsibility in managing their households’ finances, as compared to financially literate men. By jointly modeling the responsibility levels with ownership decisions, we observe that financial literacy has a positive relationship with increased responsibility levels within households for women and this in turn translates into higher probabilities of owning financial products. The evidence is observed when we study the ownership status for eighteen different financial products from six different product market segments. We also observe lower probabilities of engaging in informal banking activities such as saving informally and borrowing from moneylenders for financially literate households. The marginal benefit of financial literacy for women is seen to be greater for the privileged caste, while it decreases going down the caste hierarchy to lower caste households, where women face tacit restrictions on participating in the economic affairs of the household. The results highlight the importance of financial literacy in empowering women in decision-making and reducing social disparity.

Keywords: gender equality, gender gap, household decision-making, financial responsibility, financial literacy, caste, financial holdings

JEL Classification: J16, J15, D14, O16

Suggested Citation

Banerjee, Anurag Narayan and Hasan, Iftekhar and Kumar, Kamlesh and Philip, Dennis, The Power of a Financially Literate Woman (September 14, 2020). Available at SSRN: https://ssrn.com/abstract=

Anurag Narayan Banerjee

Durham Business School ( email )

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom

Iftekhar Hasan

Fordham University ( email )

45 COLUMBUS AVENUE
GBA-5TH FLOOR
NEW YORK, NY 10023
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

University of Sydney ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Kamlesh Kumar

Durham University, Business School, Department of Economics and Finance, Students ( email )

Durham
United Kingdom

Dennis Philip (Contact Author)

Durham University - Department of Economics and Finance ( email )

Department of Economics and Finance
Mill Hill Lane
Durham, DH1 3LB
United Kingdom

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